Forint Weakens Third Day as Hungary’s Manufacturing Contracts
The forint weakened for a third day as data showed Hungarian manufacturing shrank the most in eight months in December.
Hungary’s currency depreciated 0.5 percent to 292.87 per euro by 10:30 a.m. in Budapest. Yields on the government’s benchmark 10-year bonds fell two basis points, or 0.02 percentage point, to 6.16 percent, the lowest level since October 2005.
A purchasing-managers index as reported by 100 manufacturing companies fell to 48.9 points last month, the lowest reading since April, from a revised 52.1 points in November, MLBKT, the company which compiles the data, said in a report today. The forint gained at the end of last week after data showed Hungary’s current-account surplus widened more than analysts expected in the third quarter.
“The forint has been supported by favorable external balances but that is caused by reasons which don’t bolster growth, such as weak domestic consumption and investment demand,” Gergely Palffy and Balint Torok, Budapest-based analysts at Buda-Cash Brokerhaz Zrt., wrote in a research report today.
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